How Often Should You Change or Shop for Auto Insurance?

Car insurance premiums have been rising fast. Over the past year, rates have increased by 12.7%, bringing the average annual cost of full coverage auto insurance to $2,101 in 2025. Despite these rising costs, only 38% of drivers actually shop around for better rates. That means many people are likely overpaying for coverage.

If you haven’t reviewed your policy recently, you might be paying more than necessary or missing out on discounts. 

So, how often should you check your insurance? A good rule of thumb is once a year. However, major life events—like moving, buying a new car, or adding a driver—can mean it’s time to review sooner.

Why You Should Review Your Auto Insurance

Insurance companies adjust pricing based on factors like risk, claim trends, and inflation. Even if your driving habits haven’t changed, your premium can go up. A review can help you:

• Save money – Another insurer might offer the same coverage for less. Policyholders who shopped around saved an average of $398 per year.
• Find better coverage – Your needs may have changed, and your current policy might not be enough.
• Get new discounts – Insurers update their discount programs frequently. Some offer savings for bundling policies, safe driving, or using telematics tracking.
• Avoid overpaying – Insurers have increased rates across the board, with some companies like Allstate, Liberty Mutual, and American Family expected to raise premiums by 7.5% in 2025.

When Should You Shop for Insurance?

Most policies renew every six to twelve months, making that an ideal time to compare options. However, you should consider shopping sooner if:

• Your premium increased unexpectedly.
• You moved to a new state or ZIP code.
• You bought a new car or added a driver.
• Your credit score improved.
• You qualify for a discount your current insurer doesn’t offer.

Signs It’s Time to Switch Auto Insurance

There’s no set rule for when to change insurers, but certain situations make it worth getting new quotes.

1. Your Rates Went Up

Car insurance costs are rising nationwide. While the average annual premium is $1,547, some states have much higher costs. In Michigan, for example, full coverage insurance averages $3,131 per year, with drivers spending 4.53% of their income on auto insurance.

If your premium jumped recently, even without any accidents or tickets, it’s time to compare rates. Insurers adjust pricing based on claims in your area, inflation, and other external factors. Shopping around could save you money.

2. You Moved to a New Area

Where you live plays a huge role in your insurance rate. If you moved to an area with less traffic or lower crime rates, your premium could drop. On the other hand, moving to a high-risk area might make it worth comparing providers to find the best deal.

3. You Bought a New Car

The type of car you drive affects your insurance costs. Some vehicles qualify for lower rates because of safety features, while luxury or sports cars often come with higher premiums.

• Full coverage insurance costs an average of $2,101 per year, but rates vary significantly based on the vehicle.
• Leased or financed cars require more coverage, which can make shopping around even more important.
• Gap insurance may be necessary if your car depreciates quickly.

4. You Added or Removed a Driver

Adding a teen driver can increase premiums, but some insurers offer better discounts than others. If you recently got married, you might qualify for lower rates by combining policies. If a driver moves out of your household, removing them from your policy may lower your costs.

5. You Started Driving More or Less

If you’re driving significantly less—perhaps due to remote work or retirement—you might qualify for a low-mileage discount. Some companies offer savings for drivers who put fewer than 7,500 miles per year on their vehicles. On the flip side, if your commute increased, your risk level may have changed, making it worth checking for better rates.

6. Your Credit Score Improved

Most states allow insurers to use credit scores when setting rates. If your credit has gone up, you might qualify for lower premiums. Since insurance companies weigh credit differently, comparing quotes from multiple providers is the best way to find savings.

7. You Qualify for New Discounts

Many insurance companies update their discounts over time. You could save money by switching to an insurer that offers better deals for:

• Bundling home and auto insurance.
• Completing a defensive driving course.
• Installing anti-theft or safety devices in your car.
• Maintaining a clean driving record.

When Staying with Your Current Policy Makes Sense

Switching isn’t always the best move. In some cases, staying with your current auto insurer could be the right choice.

1. You Have Loyalty Perks

Some insurers offer loyalty rewards like accident forgiveness, vanishing deductibles, or renewal discounts. If your provider offers benefits that another company doesn’t, it might make sense to stay.

2. Your Rates Are Already Competitive

The average annual cost of car insurance is $1,547, but rates vary widely by provider. If you’re paying a fair price and your coverage fits your needs, switching may not be necessary.

3. You Want to Avoid a Coverage Gap

Canceling a policy before your new one starts—even for a day—can result in penalties, higher rates, or even legal trouble in states that require continuous coverage. Timing the switch properly is key.

How to Compare and Switch Auto Insurance

If you decide to shop for a new policy, follow these steps to make the transition smooth.

1. Get Multiple Quotes

• Use online comparison tools or work with an independent insurance agent.
• Make sure policies have identical coverage levels, deductibles, and add-ons.

2. Review Coverage Details

• Don’t just focus on price—check liability limits, comprehensive and collision coverage, and optional benefits.
• Ensure the new policy meets state requirements and, if applicable, your lender’s insurance mandates.

3. Avoid a Coverage Gap

• Set your new policy to begin before canceling your old one.
• Notify your lender if you have an auto loan.
• Turn off auto-pay on your old policy to prevent double billing.

4. Check for Cancellation Fees

• Most insurers allow you to cancel anytime without penalties, but some may charge a fee.
• If you prepaid for six months or a year, ask about a refund for unused coverage.

Conclusion

With car insurance rates expected to rise by an average of 7.5% in 2025, reviewing your policy at least once a year is more important than ever. Many drivers stick with the same insurer out of habit, but those who shop around save an average of $398 per year.

If you’ve experienced a major life change, noticed a premium increase, or found new discount opportunities, it’s worth comparing quotes. Switching policies can lead to better coverage at a lower cost.

Before making the move, double-check coverage details, ensure no lapse between policies, and confirm any cancellation fees. Taking these steps can make the transition seamless and help you secure the best possible deal.